UK Supreme Court Restricts the Use of Dairy Terms for Plant-Based Alternatives

The UK Supreme Court's recent decision in Dairy UK Ltd. v. Oatly AB affirms the exclusive reservation of dairy-related terms for milk-based products, providing clarity for food manufacturers and marketers. The ruling has implications for companies in the plant-based and alternative dairy sector, clarifying the boundaries for branding and labelling in the UK market.

KEY TAKEAWAYS

• In Dairy UK Ltd. v. Oatly AB [2026] UKSC 4, the UK Supreme Court upheld strict limitations on the use of dairy-related designations for non-dairy products, dismissing Oatly's appeal regarding its Post Milk Generation trademark registered for use in relation to oat-based food and drink products.
• The court clarified that the term "designation" under Council Regulation (EU) No. 1308/2013 is to be interpreted broadly and is not limited to the name of a product, with protections extending to any use in respect of a food or drink product.
• The decision reinforces the exclusivity of dairy terms for products derived exclusively from milk, with only narrow exceptions for cases where the marks make the true nature of the product unmistakably clear, such as “milk-free.”
• For brand owners of plant-based alternative products in the United Kingdom, this ruling demonstrates the limited scope for use of dairy terminology. It also may encourage parties to consider instigating action against other existing marks used for plant-based alternative dairy products.

BACKGROUND

In April 2021, Oatly AB, a Swedish producer of oat-based food and drink products, registered the trade mark Post Milk Generation for use in relation to various classes of goods, including oat-based alternatives to milk. Dairy UK Ltd., the trade association for the dairy supply chain in the United Kingdom, subsequently applied for a declaration that, under Section 3 of the Trade Marks Act 1994 and assimilated EU law, the mark should not be registered as it was contrary to provisions protecting dairy designations.

The dispute centred on the interpretation of Council Regulation (EU) No. 1308/2013 (the Regulation), specifically Point 5 in Part III of Annex VII, which reserves certain designations exclusively for milk and milk products. The United Kingdom Intellectual Property Office initially ruled in favour of Dairy UK, but this decision was overturned by the High Court, before being reinstated by the Court of Appeal. Oatly's final appeal to the Supreme Court has been dismissed.

ANALYSIS OF THE SUPREME COURT'S DECISION

The Supreme Court's judgment turned on two key questions: (1) the proper interpretation of "designation" in the Regulation, and (2) whether the Post Milk Generation trade mark could fall within any exception to the prohibition on the use of reserved terms for non-dairy products.

On the first issue, the court rejected Oatly's argument that "designation" meant only the formal name of a product, instead finding that it should be given its natural, broader meaning. The decision stated that the Regulation's purpose is to "regulate the use of dairy terms, such as milk, cheese, and yogurt, in relation to food products" and that these protections are not limited to exact product names, but extend to broader references that could mislead consumers.

On the second issue, the court addressed whether Oatly's trade mark could benefit from an exception under the Regulation, which allows for designations that “clearly describe a characteristic quality of the product”. The court found that the Post Milk Generation trade mark did not qualify for this exception, as it did not clearly describe a characteristic or quality of the oat-based products. The court did clarify that “milk-free” would be permitted in respect of dairy free products, as such wording is clear enough to benefit from the exception. Although the court noted that the Post Milk Generation trade mark remains valid in respect of non-food products such as clothing, this does not affect the Regulation's application to food and drink products.

IMPLICATIONS OR RECOMMENDATIONS

This decision has implications for businesses operating in the UK food and beverage sector, particularly brand owners of plant-based alternative products. Brand owners must be vigilant in their use of dairy-related terms in branding, labelling, and advertising. As demonstrated in this decision, even creative or indirect references can fall within the scope of the Regulation, which reserves terms exclusively for dairy products.

This ruling may prompt further scrutiny of plant-based product marketing across the United Kingdom, with parties considering whether to instigate action against other marks used for plant-based alternatives. However, as dairy alternatives now represent an influential sector in the UK market, this decision may lead to calls for the relevant EU-derived legislation to be reviewed and amended.

CONCLUSION

Plant-based alterative products have often sought to utilise disruptive branding which references the product they replace, as was the case with Oatly’s trade mark. Therefore, this decision will have implications for both existing trade marks and future branding decisions. It is clear that brand owners of dairy products will be reviewing how this decision can be relied upon to further protect their interests in the marketplace.

The decision related specifically to the Regulation and dairy products; however, there are numerous other products and sectors subject to equivalent regulatory frameworks. Whether it be honey, chocolate, medication or even financial services, this could lead to parties seeking to apply a broader application of the underlying principles against a wider range of trade marks or slogans.